SAP Indirect Access in 2023: What You Need to Know
SAP indirect access is a licensing model that applies to situations where users access SAP data or functionality through a third-party application.
This can include situations where users:
- Enter data into SAP from a third-party application
- View data in SAP from a third-party application
- Use a third-party application to perform action in SAP
SAP indirect access can be a complex topic. If you’re reading this, you’re probably a little confused around the different types of indirect access and how they are licensed.
Understanding indirect access and making sure you avoid making the mistakes will save your organisation a lot of money.
Here are some examples of how you may unwittingly fall foul to SAP indirect access:
- A customer uses a CRM system to enter sales orders that are then automatically imported into SAP
- A warehouse management system (WMS) is used to track inventory levels in SAP
- An HR system is used to manage employee data that is then imported into SAP
In these examples, users are accessing SAP data or functionality through a third-party application. Often users may not even be aware that they are accessing SAP data.
SAP vs Diageo
SAP indirect access and licencing became infamous in 2017 when SAP won a legal battle against long-time customer Diageo. The British multinational enterprise used its Salesforce platform to connect to its SAP systems.
SAP argued that Diageo’s customers who were stored in its Salesforce platform were technically SAP users. This meant that Diageo was massively under-licensed for some time and owed millions in damages. It was a controversial court ruling given how ambiguous SAP’s contracts are.
This case originated at a time when few people anticipated connecting a SaaS application to a traditional on-premise application provided by a third party.
“Licensing of SAP systems has always been complex. Diageo was fined £54m on what might well have been a misunderstanding of SAP’s rules. We urge all SAP customers to make sure they are licensed correctly. Also, think hard about the longevity of your SAP relationship.“
Mark Smith, CEO of Support Revolution
One week after the ruling of SAP vs Diageo, the vendor took Anheuser-Busch InBev to arbitration over similar charges. This time it sought over $600million in damages which was later settled for an undisclosed amount.
Many customers aren’t too concerned about licensing audits until they are faced with the daunting prospect of huge fees. Then the reality of an audit hits home hard.
The big risk to organisations is that many don’t know their threshold of SAP usage, where the usage is coming from, or understand what they’re licensed for.
How did SAP react to the backlash from this case?
To try and calm the situation down, SAP launched a new pricing model based on Digital Access. SAP said in a statement that the new approach:
Differentiates between direct/human and indirect/digital access, while clarifying the rules of engagement for licensing, usage, and compliance.
SAP statement – LINK
This means that customers are only charged based on the number of system-generated records or documents created through third-party access to the SAP Digital Core. This turns the conversation from ‘how many users do you have?’ to ‘how many external documents do you create?’
SAP has also identified nine different types of document that can be created, then assigned a multiplier to each type to determine pricing. Customers are charged on the initial creation of each type of document (when they are created by a third-party system). There is no additional cost for reads, updates, deletes, or creation of any further documents that are automatically generated in the system.
“The ‘procure to pay’ and ‘order to cash’ scenarios will now be based on orders, which is a measurable business outcome for any business. Static read access in third-party systems is your data, and so SAP will not charge for that.“
Bill McDermott, Chief Executive of SAP
In summary, this new licensing model is ‘document-based’ rather than ‘user-based’ and SAP hopes that it should eliminate customer concerns around falling into the same trap that Diageo did. But will it?
Will this save or cost your organisation money?
SAP now defines indirect access as ‘digital access,’ calculating your licence requirements based on the type and number of system-generated documents that are created through third-party access. So, will this save or cost you money?
To understand this, you need to be able to understand:
- SAP’s various licensing models and their associated fees
- Your own system’s setup – what SAP and third-party systems you have and how they interact
- Your future roadmap – how you are developing your systems
This could be a good option for some organisations (over indirect access), but not for all.
The standard licensing model could be less costly for those organisations who use a smaller number of digital documents.
This may also be the case for those without many third-party applications which update or feed SAP data. For example, an HR platform where only a few data points are reported back to SAP (e.g., basic pay and time off).
On the flip side, for organisations that use all the HR functions of that third-party application where all activities are reported back into SAP for reporting and operational purposes, the digital access route makes more sense.
If your organisation does not have a complete grasp of what SAP and third-party systems you have and how they interact, and then what licensing options exist and how much they cost, you are opening your organisation up to considerable financial risks.
What should you do next?
Imagine the day when you no longer need to navigate the minefield of SAP licensing…
That could be sooner than you think.
Engage with Support Revolution and we will provide guidance and recommendations on your SAP licensing, alerting you to any issues that we find before SAP has a chance to throw its audit bill at you.
What’s more, you’ll save at least 50% off your SAP support by moving to our support and maintenance service. We support all versions of SAP legacy software so you can also avoid expensive and unnecessary upgrades if you’re happy with the systems you’re currently running.
